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Investor Motivations in Investment-Based Crowdfunding

Author

Listed:
  • Fabrice Hervé

    (CREGO - Centre de Recherche en Gestion des Organisations (EA 7317) - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

  • Elodie Manthé

    (WiSEED)

  • Aurélie Sannajust

    (COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne)

  • Armin Schwienbacher

    (SKEMA Business School)

Abstract

We investigate determinants of investment decisions in investment-based (equity and real estate) crowdfunding, using a novel investment-, investor- and campaign-level database. We find that this market is a man's world, with nearly 93% of investments made by men. We find that women invest less in the riskiest investments but more in safer ones. These findings are better explained by differences in risk aversion than differences in overconfidence between men and women. Investors located in an area considered more "sociable" (socially friendly) also invest more, but only if the investor is a woman. Overall, the findings contribute to our understanding of how investment-based crowdfunding can be a viable source of entrepreneurial finance and how entrepreneurs' campaign decisions affect investor participation.

Suggested Citation

  • Fabrice Hervé & Elodie Manthé & Aurélie Sannajust & Armin Schwienbacher, 2016. "Investor Motivations in Investment-Based Crowdfunding," Post-Print hal-01452026, HAL.
    • Handle: RePEc:hal:journl:hal-01452026
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    Cited by:

    1. Nguyen, Thang & Cox, Joe & Rich, Judy, 2019. "Invest or regret? An empirical investigation into funding dynamics during the final days of equity crowdfunding campaigns," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 784-803.

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